Energy: EU goes to court to end UK tax cut

The Government is being taken to court by the European Commission for offering across-the-board tax cuts to encourage homeowners to make their houses more energy-efficient.

The commission said under EU rules such VAT reductions must be linked to “social policy”, adding: “There is no provision in the VAT directive to allow a reduced VAT rate on ‘energy-saving materials’.”

Saying it wanted to ensure “a fair and level playing field” between EU states, it added: “While it supports the objectives of the UK Green Deal, the commission does not believe that breaking EU VAT rules will help in achieving these objectives.”